Cus - Notf. 34/97, 96/2004 - There is no condition in said notifications that debits made in DEPB issued under particular FTP alone would be eligible for CENVAT credit & that debits in DEPB issued under previous FTP would not be eligible for credit: HC
By TIOL News Service
NEW DELHI, OCT 15, 2015: REVENUE is in appeal before the Delhi High Court against the order of CESTAT.
The Respondents are manufacturers of moulded cases circuit breakers, switches, fuses, etc. chargeable to central excise duty. They imported raw materials by availing exemption under Notification No. 96/2004-Cus dated 17th September 2004. The customs duty as well as additional customs duty were paid using Duty Entitlement Pass Book (DEPB) scrips issued in terms of the 2002-07 Foreign Trade Policy (FTP). The Respondents availed Cenvat credit of the additional customs duty paid through DEPB scrips. A similar import was also made in January 2004 in terms of Notification No. 34/97-Customs dated 7th April 1997 which refers to Export and Import Policy April, 1997- March, 2002.
The case of the Department was that the Assessee had paid the additional customs duty using the DEPB issued under the FTP of 2002-07 while the benefit of CENVAT credit could be availed in terms of the Notification No. 34/97-Cus, 96/2004-Cus only when the payment of import duty or additional customs duty had been made using the DEPB issued under the EXIM Policy, April, 1997- March, 2002& FTP of 2004-09 respectively.
It is on this basis that the Astt. Commissioner/Joint Commissioner by two separate orders confirmed the cenvat credit demands of Rs. 3,27,959/- and Rs. 12,37,579/- against the appellant along with interest under Section 11AB of CEA, 1944 and imposed penalty of equal amount.
The orders passed by the Asst. Commissioner/Joint Commissioner were upheld by the Commissioner (Appeals).
In appeal, the CESTAT held thus -
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CX - CENVAT credit is admissible of Additional Customs Duty paid through DEPB scrips in respect of the imports made under notification no.34/97-Cus, 96/2004-Cus - There is no such condition in the indicated notifications that the debits made, in DEPB, the licenses issued under the Foreign Trade Policy only would be eligible for credit and the debits made in DEPB issued under the previous policy will not be eligible for credit - Appeals allowed: CESTAT
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We reported this order as 2015-TIOL-1349-CESTAT-DEL.
Not satisfied with this order of the CESTAT, the CCE, Delhi is before the High Court.
The High Court observed that the Division Bench of Punjab and Haryana High Court in its order dated 22nd April 2010 in CEA No. 37 of 2010 (Commissioner of Central Excise v. M/s. Neel Kanth Rubber Mills) referred to the EXIM Policy which was amended by the Notifications dated 28th January 2004 and 17th September 2004 which entitled an importer to avail Cenvat credit of additional customs duty against the amount debited in the DEPB scrips and held that there was no condition in the said notifications that the debits made in the DEPB issued under a particular FTP alone would be eligible for CENVAT credit and that debits in a DEPB issued under a previous FTP would not be eligible for credit.
The Counsel for the Revenue also informed the Bench that no appeal has been filed against the aforementioned order of the Punjab and Haryana High Court.
Noting that the said decision covers the issue against the Department on all fours and that the Revenue has not been to show any notification by which the benefit of CENVAT credit has been expressly denied where the payment of customs duty or additional customs duty is made using DEPB scrips issued in terms of the FTP 2002-07, the Revenue appeals were dismissed.
(See 2015-TIOL-2399-HC-DEL-CUS)
